Nvidia And Amd Stock Drops

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Nvidia And Amd Stock Drops

Nvidia And AMD Stock Drops After New US Export Restrictions

According to a media report, the US is all set to introduce new restrictions on the export of chip technology to China. This news development caused chip-making companies like AMD (Advanced Micro Devices) and Nvidia to experience a sharp decline in the stock market.

Through the set of restrictions, the USA is aiming to limit China's access to high-level technology that could be used for making advanced chips. Such restrictions are already in place, but the new wave of regulations will further tighten the screw and create more problems for China's semiconductor sector.

Access To Powerful Chips Is Blocked

One of the particular areas the US is afraid of losing to China is AI, and that's the major reason behind these restrictions on China. The Biden administration wants to ensure that Chinese companies don't get access to fast and modern chips for the AI field. In addition, the USA also doesn't want China to start producing more powerful and fast chips.

The reports also suggest several Chinese companies are trying to find a way around these export restrictions. They are achieving this by acquiring chips from third parties and then exporting them back to China. So that's another angle that the USA plans to cover in the latest wave of restrictions.

The new restrictions on exports of chips will be announced by the Biden administration starting this week. This means the trade relations between the USA and China will plunge to new lows.

According to Chinese officials, the US administration is weaponizing and politicizing the trade of chips & other products.

Overall, these new restrictions will cause a blow to companies like Nvidia and AMD as they will not be able to sell powerful chips to Chinese firms. In other words, these chip-making companies will make less revenue, and that will surely find its way into the company's stock prices as well.

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